Many Alberta municipalities are overspending and its costing households.
The Canadian Federation of Independent Business (CFIB) released its Alberta Municipal Spending Watch Report Dec. 24 and excessive municipal spending cost households $9,471 in 2016 compared to $1,625 in 2006.
“Excessive municipal spending leads to increases in property taxes, which has been a major pinch point for small business owners who have struggled through a difficult year,” said Amber Ruddy, Director of Alberta. “Current municipal spending patterns are unsustainable, and may have huge implications on the profitability of small business owners in this jittery economy.”
The report, which looked at 182 municipalities, shows that between 2006 and 2016 inflation adjusted municipal spending has increased a whopping 62 per cent. This rate is two and a half times faster than Alberta’s population growth of 24 per cent.
According to the CFIB if municipal spending is tied to inflation and population growth, each household in the province would have saved $1,624 in just 2016. And from 2006 – 16 each household would have saved $9,471 in municipal taxes.
More than half of the spending was on public sector salaries, wages and benefits. According to the CFIB, Alberta public sector workers have a 16 per cent compensation advantage in salaries and benefits over their private sector counterparts.
The CFIB says the municipalities raise taxes to fund unsustainable municipal spending and only 19 municipalities have kept real operating spending increases at or below population growth.
“Excessively high municipal operating spending ultimately leads to a combination of lower infrastructure spending and/or increased taxation, both of which dampen economic development and job creation within the economy,” states the report. “If municipalities do not control their operating spending, taxpayers will have to bear a higher cost and the ability of small business to grow, prosper, and create jobs will be limited.”
How Alberta municipalities with populations of 1,000 or more were ranked according to their spending sustainability patterns from 2006-16:
(Overall provincial ranking, 1=Best and 182=Worst)
City of Lacombe made the list for worst cities spending from 2006-16. It was ranked number four worst, after Red Deer, which ranked third worst.
From 2006-16 Lacombe’s population grew 17 per cent but its operating spending increased 84 per cent.
Paintearth County made the list of 20 worst performing municipalities with populations of 1,000 or larger, ranking 167.
Paintearth County’s population dropped seven per cent over that time period but its spending increased by 35 per cent.
Town of Stettler ranked 103 with a 10 per cent population growth rate and 60 per cent growth in real operating spending and 46 per cent growth in real operating spending per capita.
County of Wetaskiwin ranked 5. It had a two per cent population growth and minus 14 per cent growth in real operating spending.
The County of Stettler ranked 145. The county had a five per cent drop in population but a 40 per cent increase in growth in real operating spending. Its growth in real operating spending per capita was 47 per cent.
Blackfalds, which has been the fastest growing city in Canada, ranked number 48. It had a 101 per cent population growth from 2006-16 and a 161 per cent growth in real operating spending.
Unranked municipalities, with populations under 1,000 were also rated from 2006-16:
• Alix saw a one per cent population growth from 2006-16 and a 60 per cent growth in real operating spending during that time.
• Bashaw had a six per cent population growth and 26 per cent growth in real operating spending.
• Big Valley had a two per cent population growth and 16 per cent growth in real operating spending.
• Botha had a six per cent decrease in population growth and 85 per cent growth in real operating spending.
• Castor had a zero per cent change in population and a 33 per cent growth in real operating spending.
• Clive had a 14 per cent population growth and minus four per cent growth in real operating spending.
• Coronation had a 12 per cent decrease in population growth and 43 per cent growth in real operating spending.
• Donalda had a 13 per cent growth in population and 17 per cnet growth in real operating spending.
• Gadsby had a 38 per cent drop in population and 131 per cent growth in real operating spending.
• Halkirk had a three per cent growth in population and 68 per cent growth in real operating spending.
• Rochon Sands had a 12 per cent growth in population and 159 per cent growth in real operating spending.
• White Sands had a 25 per cent in population growth and 135 per cent growth in real operating spending.
CFIB also rated 20 the best performing municipalities with populations over 1,000.
Nobleford made the number one best performing municipalities Ponoka County made number 4. Rimbey also made the top 20 best list ranking number 19.
The CFIB recommends that municipalities:
1. Limit spending to inflation and population growth.
2. Review core services such as snow removal, road maintenance.
3. Contract services to the private sector, where cost-efficient.
4. Implement a sustainable wage policy for public sector wage, compensation, and hiring.
5. Put in place appropriate contingency funds in case of natural disasters.